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 Nvidia had a thriving business in supplying powerful graphics
processors for video game consoles and laptop computers when
representatives of Volkswagen AG <VOWG_p.DE> asked if it could adapt
the same realistic, three-dimensional displays for the dashboards of
Audi luxury cars.
That was 10 years ago – several lifetimes in Silicon Valley terms,
but just a couple of model changes ago for the big car maker. It
took six years for Nvidia to develop the chips to power the 3-D
navigation system display that launched on the 2011 Audi A8, the
brand’s top-of-the-line sedan, compared with three to four years to
develop a new chip for gaming applications.
Along the way, Nvidia engineers learned the hard way they could not
just pop a chip designed for a laptop or a game console into a car.
“We had to be taught what ‘automotive grade’ meant,” recalls Danny
Shapiro, Nvidia’s senior director of automotive operations. In
simple terms, that meant no reboots – because a dashboard screen
that fails to light up means an angry customer and possibly an
expensive warranty repair.
The decade-long effort enabled Nvidia to make the jump from the
world of computers and game consoles into the fast-growing market
for advanced automotive displays and automated driving systems. It
is a leap that other Silicon Valley tech companies want to emulate
to cash in on the convergence of automobiles and digital
connectivity.
Nvidia’s success in landing processors on cars including the Audi A8
and the Tesla Model S sedan illustrates the growing willingness
among automakers to look beyond their traditional suppliers to
obtain a technological edge.
“They offer us computing systems with the strength” to process vast
amounts of data required by new driver assistance systems and
displays, said Ulrich Hackenberg, Audi’s head of technical
development.
Nvidia is still a niche player with a long way to go to crack the
top league of traditional automotive chip suppliers. Much larger
companies, including Japan’s Renesas Electronics Corp and U.S.
chipmakers Texas Instruments Inc, Intel Corp and Qualcomm Inc,
dominate the automotive chip business.
Nvidia's automotive sales represented just 4 percent of the
company's $4.7 billion annual revenue in its most recent fiscal
year. That in turn is just one-tenth of the $1.86 billion in
automotive semiconductors that Texas Instruments sold last year.
Brooke Williams, TI’s business manager for driver assistance
systems, said his company already knows how to deal with automakers’
demands after 35 years of supplying products for vehicles. “We
understand the automotive design cycle and how the vehicle
manufacturers and suppliers work.”
SELF-DRIVING CARS
Nvidia has made the leap to infotainment systems in vehicles, but
not yet to self-driving cars.
The company had just $23 million in sales in the automotive segment
in 2011. Growth has surged since. This year, the company expects
automotive revenue of $183 million, and says it has booked more than
$2 billion in future automotive business, most of that involving
chips for digital displays and infotainment. By 2020, Nvidia expects
to have chips on more than 32 million vehicles.
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The company is pushing to crack the emerging market for driver
assistance systems, which include such tasks as self-parking and
semi-automated steering and braking. Those systems require huge
amounts of computing power in very small packages. Nvidia has
developed and begun selling a chip called the Tegra X1 for
automotive and gaming uses, which it says can put the power of a
supercomputer in a package about the size of a postage stamp.
“Nvidia brings unparalleled graphics capabilities that could prove
critical building blocks” for driver assistance systems, said Morgan
Stanley analyst Joseph Moore.
Nvidia got coaching from automotive customers who liked the
company’s technology but were not sure of its ability to measure up
to their standards.
Early in their relationship, Audi executives took Nvidia engineers
on a trip to Audi's home factory in Ingolstadt, Germany.
"We told the Nvidia guys, 'you make one part, but we assemble a car
here from 10,000 pieces,'" said Mathias Halliger, Audi's senior
systems architect for connected vehicle technologies. "If even one
part is bad, we have a problem.”
To drive home the point, an Audi tour guide noted that one of the
luxury cars had been rejected because of a tiny flaw in the paint.
The plant tour, Halliger said, "helped Nvidia to understand our
requirements. It showed dramatically what we were looking for."
There was more for Nvidia to learn. A typical automotive production
cycle can run five years or more, compared with one year for many
consumer products. Nvidia had to go back to its suppliers to make
sure that key components, from memory to power supply, could be
upgraded as needed over that longer life cycle.
“When you work with car companies and you engage in these
developments with them, over the years you adopt their culture,”
said Nvidia Chief Executive Officer Jen-Hsun Huang, whose personal
automotive stable includes two Ferraris and two Teslas. “But the car
is dying to be reinvented.”
(Editing by Joe White and Matthew Lewis)
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